WITH the launch of new electricity supplier Panda Power this summer, competition is really heating up in the energy market.

The launch of Panda Power in June with a promise to "compete aggressively on price" brought the number of domestic electricity suppliers in Ireland to seven and sparked a summer price war. The new electricity supplier, which is part of the Panda recycling group, launched with the cheapest electricity deal in the market and prompted other suppliers to slash prices, according to energy expert Simon Moynihan of price comparison site Bonkers.ie. The result has been a range of new deals offering customers some of the best savings since deregulation, he said.

Largest savings

With seven companies now ­providing electricity and four ­companies providing gas, ­suppliers are having to work hard to ­differentiate themselves and sign up new customers.

Here Mr Moynihan outlines what is on offer.

The result has been cash-back offers, sign-up incentives and most importantly, large discounts for new customers. The largest of these discounts show that suppliers are acutely aware that price is the most important factor for customers when they think about switching. In fact, a recent survey showed that 79pc of electricity customers, and 94pc of gas customers said that when they switched, they did so because they wanted to save money.

20pc discounts

All of this competition has pushed some suppliers to increase their new customer discounts to as much as 20pc.

The introduction of these discounts has resulted in the highest ever savings over the standard rates that most customers pay, with ­electricity customers now able to save €168 per year, and gas ­customers able to save €166 per year.

Dual fuel households with an electricity and gas supply can now bring bills down by as much as €334 a year just by switching from standard rates and moving to the best new customer deals.

Bills

Gas and electricity are among the largest household bills, yet only around 15pc of customers switch for better prices each year despite the savings available.

That leaves the other 85pc paying standard rates which are typically the suppliers' most expensive tariffs.

Standard rates are also the prices that suppliers move customers on to after discounts expire.

Suppliers work hard to differentiate themselves and keep customers on supply with reward programmes and special offers. But the fact is that they are selling undifferentiated products, and the electricity or gas coming into your home will be the same regardless of the supplier. This is why customers should think about changing for better prices rather than overpaying.

When should you switch?

Customers that have been with their supplier for more than a year are generally paying expensive standard rates, and switching is usually the quickest and easiest way to save money. Most customers switch suppliers or tariffs during the winter, or after receiving ­unexpectedly large bills.

However, households use the bulk of their gas and electricity during the winter, so it makes sense to sign up to a discount deal before the cold weather starts Any time of year is a good time to switch for better prices though. That's because discounts last for one year, so you will benefit from better prices through all ­seasons. If you are thinking of switching, do ensure that you are out of contract with your supplier to avoid paying a penalty.

If you have been with your supplier for more than a year, you should be free to switch whenever you wish and without giving notice or contacting your supplier.

The best deals

Like most things, in order to get the best deals, you must be prepared take action. Your supplier is unlikely to call you out of the blue and offer to charge you less, so you either need to contact your supplier yourself and ask for a better deal, or switch to a new supplier altogether.

Most suppliers offer their best deals to new customers so switching is nearly always the best way to get the cheapest tariffs. Customers will need to be prepared to receive online bills and pay by direct debit to get the best deals though. Suppliers save money on administration and postage that way and can pass much of those savings on to customers.

Switching

Switching supplier takes around 10 days to complete, but there is no interruption to supply and as soon as you complete your application you'll effectively be on your new rates with your new supplier and your billing will start from the meter readings you provide.

There are lots of ways to get a better deal, but one of the easiest is to use an accredited energy price comparison service like Bonkers.ie where all deals that are available from all suppliers can be compared.